(Sempra Energy, 5.May.2021) — Sempra Energy (NYSE: SRE) announced first-quarter 2021 earnings of $874mn, or $2.87 per diluted share, compared to first-quarter 2020 earnings of $760mn, or $2.53 per diluted share. On an adjusted basis, the company’s first-quarter 2021 earnings were $900mn, or $2.95 per diluted share, compared to $741mn, or $2.47 per diluted share, in the first quarter of 2020.
“Over the last several years, we have narrowed our market focus, expanded investment in our utilities and worked hard to improve safety and operating results,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy. “Taken together, these activities also support our financial commitments and, in part, are reflected in the strength of our first quarter results. The company is well positioned to deliver another strong year of financial performance.”
The reported financial results reflect certain significant items as described on an after-tax basis in the following table of GAAP (generally accepted accounting principles in the United States of America) earnings, reconciled to adjusted earnings, for the first quarter of 2021 and 2020.
Building Resiliency in California Utilities
Sempra Energy’s California utilities, San Diego Gas & Electric Co. (SDG&E) and Southern California Gas Co. (SoCalGas), both recently announced net-zero emissions goals, contributing to Sempra Energy’s overall efforts to help shape a more sustainable future. In March 2021, SoCalGas announced its goal to achieve net-zero greenhouse gas (GHG) emissions in its operations and delivery of energy by 2045. With this commitment, SoCalGas becomes the largest gas distribution utility in North America to set a net-zero GHG emissions target across all three scopes.
Building on the sustainability strategy SDG&E released last October and its goal to reach net-zero GHG emissions by 2045, the utility announced it is developing two hydrogen pilot projects, it is nearing completion of an additional battery storage facility and it has begun construction on another, while also launching a vehicle-to-grid pilot program featuring electric school buses, among other efforts.
Additionally, SDG&E and SoCalGas recently received a proposed decision for attrition rates for 2022 and 2023, providing improved visibility into funding in support of safety and reliability programs. SDG&E’s attrition rate would be 3.92% for 2022 and 3.7% for 2023, and SoCalGas’ attrition rate would be 4.53% for 2022 and 3.97% for 2023.
Continuing Growth at Oncor
In Texas, Oncor Electric Delivery Company LLC continues to play a key role in meeting the growing energy needs of Texas’ economy through the execution of its 2021-2025 capital plan. In the first quarter of 2021, Oncor continued to see strong organic growth and connected approximately 19,000 new premises, compared to approximately 18,000 in the first quarter of 2020.
Making Progress on Sempra Infrastructure
Last month, Sempra Energy announced that it has entered into a definitive agreement to sell a non-controlling 20% interest in Sempra Infrastructure to KKR for $3.37bn in cash, subject to adjustments. The transaction values Sempra Infrastructure at approximately $25.2bn, including expected asset-related debt at closing of $8.37bn. Proceeds from the sale will be used to help fund growth in Sempra Energy’s U.S. utilities and to further strengthen the company’s balance sheet. The sale is expected to be accretive to earnings. The transaction is forecasted to be completed in mid-2021, subject to customary closing conditions, including consents from third parties and regulators.
On 26 April 2021, Sempra Energy launched its exchange offer to acquire all the outstanding shares of Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) not owned by Sempra Energy. As part of the exchange offer, Sempra Energy intends to list its shares of common stock on the Mexican stock exchange (Bolsa Mexicana de Valores, S.A.B de C.V.). The exchange offer is expected to be completed by the end of May.
Additionally, IEnova continues to advance its development projects in Mexico with a focus on improving the country’s energy security. In March, IEnova achieved commercial operations on its Border Solar project, a 150-megawatt solar facility in northern Mexico, and completed the acquisition of the remaining 50% equity interest in Energía Sierra Juárez, a cross-border wind generation complex in Baja California, Mexico.
Earnings Guidance
Sempra Energy is updating its full-year 2021 GAAP EPS guidance range to $7.42 to $8.02 and affirming its full-year 2021 adjusted EPS guidance range of $7.50 to $8.10.
Non-GAAP Financial Measures
Non-GAAP financial measures include Sempra Energy’s adjusted earnings, adjusted EPS and adjusted EPS guidance range. See Table A for additional information regarding these non-GAAP financial measures.
Internet Broadcast
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. ET with senior management of the company. Access is available by logging onto the website at www.sempra.com. For those unable to log on to the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 6657833.
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